Sony, Lenovo's big challenge: Convincing consumers

Sony and Lenovo have entered 2014 with plans to splurge on marketing and launching a slew of handsets in India.

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NEW DELHI: Big global brands Sony and Lenovo have entered 2014 with plans to splurge on marketing and launching a slew of handsets in India, hoping to create a flutter among the top pack by capturing a share of the lucrative market ceded by the likes of Nokia and BlackBerry.

Analysts say Sony — with a strong brand presence in the laptop, television and camera segments — and Lenovo, in laptops, are best placed among handset makers with smaller market shares to close in on leaders Samsung, Micromax and Karbonn given their brand recall.

They, however, need to aggressively invest in marketing to convince consumers that they can make good cellphones too. Home-grown Lava, which is fast gaining market share, is pegged as the dark horse, setting the stage for a potential churn at the top in two to three years.

"Sony and Lenovo are serious companies and better placed than the smaller Indian players" says Jayanth Kolla, partner at telecom research firm Convergence Catalyst.

"They have their own R&D and manufacture their own devices". The Mobile Store's chief executive Himanshu Chakravarti added that though Lenovo is picking up momentum in terms of marketing and sales, Sony has grown by "leaps and bounds" over the last six to eight months.

"About 10% of our sales come from Sony," he said. Both companies, who entered the Indian handset market late 2012, said they are targeting a 10% share of smartphone market in about two years. Sony is planning to spend substantially more in the next fiscal year starting April 1, than the . 300 crore it spent on marketing in 2013-2014 . Lenovo India didn't give exact figures, but said its spending will be much more than in 2013.

"There is no better moment for these brands, than now, to establish themselves in emerging markets," Kolla said, referring to the gap left by BlackBerry and Nokia. Samsung, Micromax and Karbonn together accounted for over 60% of the smartphone market during the July-September period in 2013 when nearly 13 million smartphones were sold. Nokia's market share was 5% in the period, compared with 12% a year back. BlackBerry was worse off, with its share falling to 0.5% from 3.9% in the previous year. Sony and Lenovo, along with some 24 others, together make up for around 29% of the smartphone market, IDC said.

Lava, which had started out with Micromax and Karbonn, has been a bigger gainer with 4.7% share in that period.

"Our challenge is to enhance distribution, increase retail presence. We will also look at enhancing the value of mobile phones," Kenichiro Hibi, MD, Sony India, said recently.